Business Leadership: the Catalyst for Accelerating Change
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BUSINESS LEADERSHIP: THE CATALYST FOR ACCELERATING CHANGE With thanks to Twitter: @30percentclub BoardEx for LinkedIn: 30percentclub-uk its ongoing Instagram: 30percentclub support Gender balance on teams achieves better outcomes. OUR MINIMUM OBJECTIVES | 30% women on FTSE 350 boards and 30% women at senior management level of FTSE 100 companies by end of 2020 AS CHAIRS, WE HAVE AN OBLIGATION TO SPEED UP THE PACE OF CHANGE AND INFLUENCE THE BOARD SELECTION PROCESS TO TAKE ADVANTAGE OF THE AVAILABLE TALENT POOL. WE MUST CHAMPION DIVERSITY WITHIN OUR OWN ORGANISATIONS, DEVELOP OUR FEMALE TALENT AND BE DEMANDING WITH SEARCH AGENCIES TO ACHIEVE BETTER FEMALE REPRESENTATION ON BOARDS. Sir Win Bischoff, Chair, JP Morgan Securities DIVERSE BOARDS MAKE BETTER COMPANIES. THEY DRIVE UP PROFITABILITY, ENHANCE INNOVATION AND ENSURE STRONGER CORPORATE REPUTATIONS. SHAREHOLDERS ARE INCREASINGLY EXERTING PRESSURE ON COMPANIES THAT ARE SLOW TO IMPROVE WE ARE PLEASED TO SEE THINGS ARE MOVING IN THE RIGHT DIRECTION AND WE DO NOT “INTEND TO TAKE OUR FOOT OFF THE ACCELERATOR. Brenda Trenowden CBE Global Co-Chair, 30% Club WHO WE ARE LEADERS LEADING BY EXAMPLE We are a group of Chairs and CEOs taking action to increase gender diversity on UK boards and senior management teams. The 30% Club campaign was set up by Dame Helena Morrissey in 2010 with the aim of achieving a minimum of 30% female representation on FTSE 100 boards. That target was reached in September 2018 and good progress has been made (current percentage is 34.1%). But, there is still much more work to do to achieve better gender balance at the top of businesses. Now under the joint leadership of Brenda Trenowden CBE and Ann Cairns, our energies are concentrated on supporting more women into senior management roles and to embedding diversity into enterprise-wide strategy. Ann Cairns Brenda Trenowden CBE Global Co-Chair, 30% Club Global Co-Chair, 30% Club FTSE 100 CEO MEMBERS Sir Iván Arriagada, Antofagasta Keith Barr, InterContinental Hotels Group** Dominic Blakemore, Compass Group** Alison Brittain CBE, Whitbread** FTSE 250 CEO MEMBERS Lord Stephen Carter, Informa Group** Mike Coupe, Sainsbury** (stepping down 2020) Andrew Croft, St James’ Place Wealth Mgmt Alan Aubrey, IP Group Mark Cutifani, Anglo American Ulrik Bengtsson, William Hill Brian Bickell, Shaftesbury** John Fallon, Pearson** (stepping down 2020) Liv Garfield, Severn Trent** Olivier Brousse, John Laing Group (stepping down 2020) Thierry Garnier, Kingfisher WH Smith** Chris Grigg, British Land** Luke Ellis, Man Group Steve Hare, Sage UK Rod Flavell, FDM Group** Mike Henry, BHP** Thierry Garnier, Kingfisher** Stephen Hester, RSA Insurance Group** Tristia Harrison, TalkTalk Group** Chris Hill, Hargreaves Lansdown Andrew Horton, Beazley António Horta-Osório, Lloyds Banking** Kevin Hostetler, Rotork Alan Jope, Unilever ** PZ Cussons Dave Lewis,Tesco Jonathan Lewis, Capita** Chris Loughlin, Pennon Group** David Nicol, Brewin Dolphin** (stepping down 2020) Johan Lundgren, easyJet** John O'Reilly, Rank Group** Steve Rowe, Marks & Spencer** John Martin, Ferguson (stepping down 2020) Ivan Menezes, Diageo** Preben Prebensen, Close Brothers** Steve Mogford, United Utilities Group** Andrew Rashbass, Euromoney Inst. Investor** David Squires, Senior plc Robert Noel, Landsec** (stepping down 2019) Noel Quinn, HSBC Holdings Jon Stanton, Weir Mark Read, WPP** Fani Titi, Investec** Nick Read, Vodafone Tobias van der Meer, Hastings Group Holdings** Andrew Reynolds Smith, Smiths Group Guy Wakeley, Equiniti Group Alison Rose, Natwest Group** Roger Whiteside, Greggs** David Schwimmer, London Stock Exchange** Keith Skeoch, Standard Life Aberdeen** David Sleath, Segro** James (Jes) Staley, Barclays Bank David Stevens CBE, Admiral Group** David Thomas, Barratt Developments** Maurice Tulloch, Aviva** Emma Walmsley, GlaxoSmithKline** Andrew Williams, Halma Nigel Wilson, Legal & General Group** Bill Winters, Standard Chartered Bank** Charles Woodburn, BAE System ** 30% or more women at ExCo + direct report levels Source: Hampton-Alexander Review, Nov 2019 FTSE 100 CHAIR MEMBERS John Allan, Barratt Developments*/ Tesco* John Barton, EasyJet* FTSE 250 CHAIR MEMBERS Charles Berry, Centrica Sir Donald Brydon CBE, Sage* Charles Berry, Weir Sir Roger Carr, BAE Systems* Stuart Chambers, Travis Perkins* Stuart Chambers, Anglo American* Andy Cosslett, Kingfisher* Annette Court, Admiral* John Cryan, Man Group Lord Mervyn Davies, Intermediate Capital* Roger Devlin, William Hill* Sir Ian Davis, Rolls-Royce Andrew Duff, Elementis* Roger Devlin, Persimmon* Sir Charles Dunstone, TalkTalk Andrew Duff, Severn Trent*(stepping down 2019) Ian Durant, Greggs* Mike Evans, M&G* Douglas Flint, IP Group Douglas Flint, Standard Life Aberdeen* Gary Hoffman, Hastings Group* Anita Frew, Croda International* Martin Lamb, Rotork* Sir Peter Gershon, National Grid* Paul Lester, Essentra*/ McCarthy & Stone* Andrew Higginson, WM Morrison Simon Miller, Brewin Dolphin* Sir John Kingman, Legal & General Group* Sir John Parker, Pennon Group* Ken Mackenzie, BHP* Sir Ian Powell, Capita* Sir Adrian Montague, Aviva* (stepping down 2020) Sir Nigel Rudd, Signature Aviation* Deanna Oppenheimer, Hargreaves Lansdown*` David Tyler, Hammerson* Don Robert, London Stock Exchange Group Sir Nigel Rudd, Meggitt* (stepping down 2020) Sidney Taurel, Pearson* José Viñals, Standard Chartered Bank* Paul Walsh, Compass Group* (stepping down 2021) * 30% or more women on board Source: BoardEx, 13 January 2020 OUR APPROACH THE BUSINESS CASE FOR DIVERSITY IN SENIOR ROLES IS CLEAR The business case is clear – a higher standard of corporate governance, improved financial performance and enhanced capacity to attract and retain female talent. Diverse teams make better decisions: McKinsey research continues to show a significant link between diversity and financial performance, with companies in the top quartile for executive team diversity 15-24% more likely to outperform their national industry median EBIT margin than their bottom quartile peers. Similarly Credit Suisse found that companies where women made up at least 15% of senior managers had more than 50% higher profitability than those where female representation was less than 10%. One woman is not enough: 30% is the proportion when the contributions of a member of a minority group are valued in their own right. Research has shown that a critical mass of three or more women can cause a fundamental change in the boardroom and enhance corporate governance. 30% WOMEN ON FTSE 350 BOARDS OUR BOARDROOM GOAL September 2019 saw women’s representation on FTSE 350 boards reach 30% for the first time in history. Whilst we celebrate this milestone, this target was a minimum and there is still much work to do – 128 companies have still not reached 30% and there is still 1 all-male boards in the FTSE 350 (down from 151 in 2010). Driving further progress will require demand by investors, leadership from board chairs, commitment by nominations committees and action from head hunters. It will also require ongoing investment from CEOs and leadership teams in developing the pipeline of female directors Percentage of female directorships on FTSE 350 boards 35% 32.3% 30.1% 30% 27% 24.5% 25% 21.9% 23% 20% 17.4% 14.7% 15% 11.5% 9.5% 10% 5% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GETTING TO 30% AT FTSE 100 SENIOR MANAGEMENT LEVEL THE PIPELINE GOAL Achieving 30% women at senior management level of FTSE 100 companies is also within sight. Women currently comprise 28.6% at Executive Committee and direct report levels. FTSE 100 38 companies have already reached 30%, up from 35 in 2018 There are 6 all-male Executive Committees, up from 5 in 2018 Source: Hampton-Alexander Review | FTSE Women Leaders, November 2019 R INVESTOR TOOLKIT STO INVE FOR ENGAGING UP BOARDS ON DIVERSITY RO tent G of In S ent ION m T bers te TA mem Sta EC f our XP half o ate E n be orpor RE ties o on c SU sibili nies able LO spon ompa suit ISC hip re tee c entify D ards inves s to id l stew with use veral gage oard our o ly en the b rt of ctive cess s pa will a pro A , we ng the stee ients cludi inve nd cl es in of an set a issu nding as ance ard. rsta ent and overn e bo unde spar ners ible g for th sive tran ow t ow pons ates rehen to be nd h sse res ndid omp nies ard a As a are ca th a c ompa he bo The 30% Club believes that THE BOARD’S ROLE IN DIVERSIT Y rs we the rs wi ect c for t age p of vesto e exp bers man dshi ide in es, w mem gender balance on boards not ewar on prov polici d new e st ake To rsity to fin Companies that value diversity of thought, and the for th e m dive used , ts w any’s res d. odes only promotes better leadership en ers omp cedu boar ce C so i t d be efi an nga ed hri i g, v vestm mb c e pro erse ernan t as c a e n ts of e g , t v n inno ative in r me ing th a div Gov sity a and governance, but further of ou hat gard ures orate diver alf of t re s ens Corp nt to d and productive workforce, are committed to fostering beh art ces nder itme e an ts. P the at pro ed u omm mak contributes to better all-round clien des th equir e of c e will an environment that enables that diversity to permeate and inclu res r ultur ies w ging ility rds closu of a c nquir enga oard performance, and ultimately nsib boa s dis nce of e it for b and define the culture. This commitment begins at the spo the well a evide types toolk re nt of es. As see f the stor me pani ct to ils o r Inve increased corporate performance.